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  1. #1
    Join Date
    Jan. 26, 2006
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    Fort Worth, Texas
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    Default 2013 tax increases, what are you are doing to be prepared

    I am filing a new W-4; changing dependents to about twenty or so then setting a separate bank account up to place my estimated withholding, which I shall hold onto until about December 30, 2013 when I send the estimated withholding in.


    Not stopping to pay taxes, but withhold the automated transfer at least to very end... sort of cliff for congress to wonde about


    3 members found this post helpful.

  2. #2
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    Aug. 12, 2010
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    Westford, Massachusetts
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    My goal is generally to have us owing $1,000 or less, but always something, when we file our federal tax return in April. I don't want to get a big refund and give the feds an interest free loan during the year .

    For the last several years, our W-4 setup has produced this result for us. BUT, I'm watching carefully. If the Bush tax cuts expire and nothing is done before next December to reinstate them, or something like them for the middle class (as defined under $250K for married couples), we'll get hammered in April. One thing the Bush tax cuts did was remove the "marriage penalty" from the tax tables. When the marriage penalty is embedded in the tax tables, it is REALLY hard to get W-4s right when you have both spouses working and they earn close to the same amount (which is the case with us). If the marriage penalty comes back, and stays, I'll have to do estimates and figure out how to redo the W-4s, probably something like "married, but withhold at higher single rate", which we haven't had to do for a long time. The "marriage penalty" was a real pain in the butt, in addition to being basically unfair and contrary to the supposed goal of having stables families.



  3. #3
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    just be aware that you must owe less than $1,000 in tax after subtracting withholdings and credits, or if you have paid in at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.... other wise you are subject to pay a penalty for underpayment of estimated tax



  4. #4
    Join Date
    May. 26, 2011
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    We're moving more of the investments into tax-exempt investments.
    "I couldn't find my keys, so I put her in the trunk"



  5. #5
    Join Date
    Oct. 9, 2012
    Location
    Washington State
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    Default

    Since changes to the tax code goes miles over my head, I am not doing anything to prepare until someone can explain to me what I need to prepare for. Instead I am going to react after I see what is what.


    2 members found this post helpful.

  6. #6
    Join Date
    Oct. 16, 2011
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    Quote Originally Posted by Crackerdog View Post
    Since changes to the tax code goes miles over my head, I am not doing anything to prepare until someone can explain to me what I need to prepare for. Instead I am going to react after I see what is what.
    Same for me.
    *Wendy* 4.17.73 - 12.20.05



  7. #7
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    Default

    Even IRS agents don't understand the tax code. I think there's some evil genius somewhere that just makes it all up to get a good laugh.
    Thus do we growl that our big toes have, at this moment, been thrown up from below!


    1 members found this post helpful.

  8. #8
    Join Date
    Jul. 18, 2001
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    Here and there
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    Default

    Quote Originally Posted by Crackerdog View Post
    Since changes to the tax code goes miles over my head, I am not doing anything to prepare until someone can explain to me what I need to prepare for. Instead I am going to react after I see what is what.
    Ditto.
    Not all who wander are lost.

    Ralando II



  9. #9
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    Jan. 26, 2006
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    Default

    Quote Originally Posted by Crackerdog View Post
    Since changes to the tax code goes miles over my head, I am not doing anything to prepare until someone can explain to me what I need to prepare for. Instead I am going to react after I see what is what.


    really suggest that you kind of look at what Congress is going to do to you... I guess you are one of the 49% or so that actually pays taxes, so it would be advisable to have basic understandings of the tax codes



  10. #10
    Join Date
    Sep. 24, 2004
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    Piedmont Triad, North Carolina
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    Default

    Quote Originally Posted by clanter View Post
    really suggest that you kind of look at what Congress is going to do to you... I guess you are one of the 49% or so that actually pays taxes, so it would be advisable to have basic understandings of the tax codes
    It is more accurate to say what Congress DID to you ten years ago. The "BUSH" tax cuts were held hostage to a 10 year sunset provision. That is what the tax cliff really is. IF Congress and the president do nothing the "BUSH" tax cuts expire. Everybody's taxes increase then ... Well except the 47% that don't pay fed tax .



  11. #11
    Join Date
    Oct. 9, 2012
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    Washington State
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    Quote Originally Posted by clanter View Post
    really suggest that you kind of look at what Congress is going to do to you... I guess you are one of the 49% or so that actually pays taxes, so it would be advisable to have basic understandings of the tax codes
    I have tried to look, it looks like they don't even know what they are going to do to me. We don't have money squirreled away that needs protecting or stocks or anything like that. Just a paycheck, a mortgage, and a bunch of bills.

    Back in the dark ages, when computers were still younguns, I worked part time for an accountant. One of my jobs was to file the changes to the tax code in the tax code books that came in a packet every month. I can't remember how many books there were altogether, but it was a lot. Some of the changes were one line on one page of 7 point print. I hated that time of the month.

    So even if I could get my mind around all the ever changing rules of the tax fiefdom, I would still have to wait to react to the changes to the 2013 taxes, until Congress et al makes up their mind how they are going to squeeze more blood from this particular stone, I won't know how to deal with it.



  12. #12
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    Sep. 24, 2004
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    Crackerdog ... There is only one thing to keep in mind. Taxes are going to increase.

    We don't have a revenue problem, we have a spending problem.


    4 members found this post helpful.

  13. #13
    Join Date
    Feb. 1, 2001
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    Finally...back in civilization, more or less
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    I will adjust my withholding once we have some clarity on what the new rates are going to be. My goal is always to get as close as possible to my actual liability, neither providing an interest free loan to the government nor winding up with a big tax bill.
    **********
    We move pretty fast for some rabid garden snails.
    -PaulaEdwina


    2 members found this post helpful.

  14. #14
    Join Date
    Dec. 4, 2005
    Location
    washington state
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    Default

    Welp, I am taking Taxation I in a few weeks. I have also joined IMA and am going to a dinner/lecture with one of the best CPAs around for explanation and guidance for this in February.
    The Knotted Pony

    Proud and upstanding member of the Snort and Blow Clique.



  15. #15
    Join Date
    Oct. 12, 2005
    Location
    Va
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    3,750

    Default

    I'm drinking a lot of wine!


    1 members found this post helpful.

  16. #16
    Join Date
    Aug. 12, 2001
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    Trailer Trash Ammy!
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    Honestly I make so little that it doesn't really impact me much one way or the other.
    "The standard you walk by is the standard you accept."--Lt. Gen. David Morrison, Austalian Army Chief



  17. #17
    Join Date
    May. 17, 2010
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    Where humidity isn't just a word, it's a way of life.
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    Default

    Quote Originally Posted by clanter View Post
    I am filing a new W-4; changing dependents to about twenty or so then setting a separate bank account up to place my estimated withholding, which I shall hold onto until about December 30, 2013 when I send the estimated withholding in.


    Not stopping to pay taxes, but withhold the automated transfer at least to very end... sort of cliff for congress to wonde about
    You will have to make QUARTERLY estimated tax payments, not one payment at the end of the year to avoid penalties and interest. The IRS requires you to pay taxes on a quarterly basis at minimum(unless your income is all in the last quarter).

    I have had clients get burned (huge penalties and interest even though they had paid in at least 100% of what they paid the prior year; just at the last minute) by doing just what you are suggesting.



  18. #18
    Join Date
    Mar. 22, 2000
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    America, The Beautiful!
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    Default

    What am I doing? I'm cutting back my spending. Slower internet, basic digital cable, limited cell phone, less groceries, no more trips to the movie theater, increasing my car insurance deductible, etc. My income has not gone up hardly at all in several years. I'll be cutting off the little bit I still contribute to my two college age children. They'll have to cut back, too. I may be looking for cheaper, less safe living arrangements soon that are further away from my job. I'm also looking at a 2nd income source. Investments don't really matter anymore, they've pretty much been decimated in the last 4 years anyway.

    I can't get by with more taxes out of my check. And I don't really make all that much, between $50k & $80k (not giving specifics, sorry).

    Thank you Mr President & Congress.



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